Blinded cash issuers (using for example this system) and the bitcoin system could make a pretty good combination. It could be similar to how private banks kept gold reserves and issued bank notes:

* Use bitcoin or a modified bitcoin/RPOW/bitgold like system to create a securely auditable, unforgeable, public, non-anonymous "high power money" analogous to gold.

* Issuers (or "banks") of securely anonymous (blinded) bank notes keep bitcoins as reserves. By analyzing their public bitcoin chains, any customer can audit the reserves of any of these issuers.

Those who don't care about their privacy or who want to be issuers with trustworthy reserves can use bitcoins directly, while cash customers who like their privacy can use the securely anonymous blinded cash. That forms a two-tier system, analogous to the old privately issued money system that involved mining and storing gold (bitcoins) and issuing bank notes backed by gold (anonymous cash backed by bitcoin reserves).

The whole system could be far more secure than the old gold-reserve + banknote system, because the "gold" is more difficult to steal but far easier to securely audit, and the "bank notes" far harder to counterfeit and (especially against modern investigation techniques) more difficult to trace/identify users. The "gold window" for these banks could be far more secure from various threats than in the old private bank note issuers. And it's all conveniently online.

So my take is to take advantage of the public and basically non-anonymous nature of bitcoin/RPOW type systems to securely audit people who claim to own X of them (such as currency issuers), while using blinded digital cash for transactions where privacy is more important than public audit.

This is quite insightful and obvious in retrospect. Bravo.

This is all predicated on the actual "computing power backing" being able to retain "intrinsic value" as a drop-in replacement for gold. But if that turns out to be the case (e.g. if the BitCoin continues to rise against the dollar, or at least hold steady) then this would work. I'll be curious to see how it all turns out.

I love your solutions. I have been archeticing much of the same for a while and just not got around to coding just yet. You may have saved us all bunch of time and given us a head start

I have sent you a private message you should still check.

Meanwhile, I understand your ideas for multiple server nodes where people can chose and manage where their value is held at from their wallet. But what is your solutions for redundant data storage in the case where a server/banking/contract node fails or worse, confiscated unjustly. Do your server nodes support the redundant data exchange between them? Ideally the server nodes should communicate through a decentralized P2P backend like bitcoin as that is one of the advnatanges and attractions of it. Such a redundant data backend would account for worse case senarios or to work around the lose of any node.

In normal day to day operations maybe they can exist in some for of hierarchy to provide faster clearing of transactions which a P2P network could take time to clear under certain conditions/senarios. With designated 1st, 2nd and 3rd tier server nodes in each jurisdiction or that are first tier for a particular basket/currency/contract issue. Not too much unlike the way root DNS servers work (but this is one way downstream) and High Availablity Systems work. If one server node does go missing or down, the server/P2P nodes can reorganize and designate a new one. Possibly a hybrid of an automated P2P network with independent trusted human node operators.

Thoughts?

On the clienet side...I would be interested in creating a web client coded in python client.... if you can provide information on how I can tie python into any of your java or C libraries.

Advantages of Open Transactions that bitcoin maybe can not provide...OT can reach other markets faster leading to faster adoption.1) Allowing entities to issue currencies can make it easier for local communities to use adopt; issuing their own locally controlled and backed and local agreed upon currency while at the same time tieing their system into what could be a more global network of server nodes.2) Allowing faster adoption by people that do not understand bitcoins. You do not have to EXPLAIN a gold or silver coin to anyone living on earth. Thus a metal/commodity backed and issued currency by a recognized and reputable issuer can gain in populartiy faster as well. LR and Pencuix are great since you can own gold/silver through them but I do not trust their centralized operations. But if a popular silver mining company issued and backed silver grams into a decentralized OT system, you could count me in. Local merchants would be more willing to accept such digital silver more easily as compared to convincing them to accept bitcoins.

Anyone with bitcoins could also issue bit coins into the OT network which indeed has a value in its rarity alone.

As others touched on in this thread. The crediblity of the issuer ideally needs to be proven satisfactorily to the end holder/user of the currency. There are a number of ways to do this... of which I can share my ideas later.

I would also be interested in making public statistics available on each currency which the server nodes can accumulate.Volume of transactions, amount in circulation, # users holding a particular currency, etc... This could ultimately lead to a rating system as to the most widely used, liquid and trustable currency issues.

Ultimately, the entire system would function much like the stock and future markets allowing the trading and transfer of assets between individuals/entities (alternative real open market) ultimately putting an end to all the behind the scenes coruption in todays FX, futures and equity markets. Putting control back into the PEOPLEs hands and away from the few elite controllers that have a monopoly on money and exchange today.... forcing us to play by their rules where as people now days have the code and power to take back such control in the form of bitcoin and OT like systems.

Those who don't care about their privacy or who want to be issuers with trustworthy reserves can use bitcoins directly, while cash customers who like their privacy can use the securely anonymous blinded cash. That forms a two-tier system, analogous to the old privately issued money system that involved mining and storing gold (bitcoins) and issuing bank notes backed by gold (anonymous cash backed by bitcoin reserves).

The whole system could be far more secure than the old gold-reserve + banknote system, because the "gold" is more difficult to steal but far easier to securely audit, and the "bank notes" far harder to counterfeit and (especially against modern investigation techniques) more difficult to trace/identify users. The "gold window" for these banks could be far more secure from various threats than in the old private bank note issuers. And it's all conveniently online.

Two very important paragraphs, thanks for this great idea. DigitalCash + Bitcoin = PGMS = Pretty Good Monetary System

I suppose you can run an OT server on a TOR hidden server? Throwing TOR into the equation gives us a highly resilient system which that government can do little to shut down. Awesome!

Philosophical Tangent...It seems that the growth of the internet and social networks is quickly out-pacing the ability of governments for control them. I think we are going to see some revolutionary shit in the next 10 years. Bitcoin is one example.

I think that neural networks are going to be a huge thing. The internet will soon become I giant AI hive mind of neural networks and human integration with this system will become more sophisticated with direct brain-to-computer interfaces. We are becoming the internet; the next phase of evolution. cool shit! :-)

I think that neural networks are going to be a huge thing. The internet will soon become I giant AI hive mind of neural networks and human integration with this system will become more sophisticated with direct brain-to-computer interfaces. We are becoming the internet; the next phase of evolution. cool shit! :-)

I have this idea called "protocol AI" in my novel. The idea is that business interaction are mediated by a network of AI whom jobs is to learn reputation, make judgement calls, and so on. They are manned by game theory experts, who are called judges, but their real job is to make their protocol AI the best mediator on the internet.

I suppose you can run an OT server on a TOR hidden server? Throwing TOR into the equation gives us a highly resilient system which that government can do little to shut down. Awesome!

It would be trivial for government(s) to shut down Tor's directory servers. There are only a handful of them. I think that I2P has a far better design in this regard. It has no central directory servers, the use of UDP (as well as TCP), streaming support, and the ability to TX/RX over different paths. Not to mention that I2P's hidden services (called eepsites) are WAY faster than Tor's hidden services.

The auto update feature is the only scary part of I2P. If the authors were forced to trojan, or otherwise tamper with the I2P update, the network would be screwed. This can be remedied by switching the update feature off and manually auditing each update of course.

I think that neural networks are going to be a huge thing. The internet will soon become I giant AI hive mind of neural networks and human integration with this system will become more sophisticated with direct brain-to-computer interfaces. We are becoming the internet; the next phase of evolution. cool shit! :-)

I have this idea called "protocol AI" in my novel. The idea is that business interaction are mediated by a network of AI whom jobs is to learn reputation, make judgement calls, and so on. They are manned by game theory experts, who are called judges, but their real job is to make their protocol AI the best mediator on the internet.

Go one step further: artificial neural networks are probably going to surpass the capacity of their biological counter parts (humans). Eventually we'll have ANNs designing ANNs! Your Judges could themselves be computers.

Sounds like a cool book. Have you read Necromancer? It explores the idea of purely digital individuals.

Blinded cash issuers (using for example this system) and the bitcoin system could make a pretty good combination. It could be similar to how private banks kept gold reserves and issued bank notes:

* Use bitcoin or a modified bitcoin/RPOW/bitgold like system to create a securely auditable, unforgeable, public, non-anonymous "high power money" analogous to gold.

* Issuers (or "banks") of securely anonymous (blinded) bank notes keep bitcoins as reserves. By analyzing their public bitcoin chains, any customer can audit the reserves of any of these issuers.

This idea is really cool, I just repeat it below to expand it a little bit.

1) An OT issuer backs up his "OTBitcoins" with bitcoins. These "OTBitcoins" provide instant payment and untraceable digital cash.2) Everybody can verify that he does not issue more "OTBitcoins" than he really holds, simply by inspecting the public bitcoin blockchain. This is something that could be done automatically in a combined bitcoin OT client whenever a user wants to purchase "OTBitcoins"

Now here comes a little expansion, I would be interested what you think of it:

There is one little problem in the above example:The OT issuer can still be unable to deliver bitcoins if he lost the private key to the bitcoins he used to backing up the "OTBitcoins". So just inspecting the public blockchain will not help.The OT issuer of "OTBitcoins" also has to proove that he has access to the bitcoins which form the backup.

Solution:The OT issuer backs up his "OTBitcoins" with two bitcoin addresses.He then sends *continuously* back and forth bitcoins between these two addresses, so that everybody can see that he really has access to the private key and that he can make good his "OTBitcoins" with real bitcoins.Performing this check could also be done automatically in a combined bitcoin OT client whenever a user wants to purchase "OTBitcoins".

So at least at the date of purchase of "OTBitcoins" the user knows that the issuer can make up good the claim of delivering real bitcoins.

Of course if the issuer looses the private key in the future or runs away, the "OTBitcoins" from this issuer will become worthless.So the idea of multiple issuers forming a "OTBitcoin" basket currency will help to reduce this risk.

Since I very much like the idea of crowd-based services, the amount of "OTBitcoin" issuers could be equal to the number of bitcoin users.The only thing needed for it would be that a combined bitcoin OT client allows the user to become a "OTBitcoin" issuer with a part or all of his bitcoins in his wallet. The parts of the bitcoins used for issuing "OTBitcoins" would then start the above ping-pong sending back and forth of bitcoins between addresses and would be locked from normal bitcoin spending.As a reward the user receives a share of the "OTBitcoins" equal to the bitcoins he dedicated to this from his wallet.He can then use these "OTBitcoins" for instantanteous payments and untraceable payments.

In a nutshell, every owner of bitcoins can sign up to become part of a crowd-based "OTBitcoin" bank which provides untraceable digital cash.I would like to see how governments try to shut down or control something like this!

Maybe there are better or easier solutions.Curious what you think of it.